Amadeus: Low cost airlines making Asian inroads

30 October 2013

New analysis from Amadeus’ Air Traffic solution reveals that low-cost carriers are showing significant confidence in their potential with an overall global increase in seat capacity of 6.8 per cent in the first six months of 2013 compared to the same period in 2012.

The analysis paints a picture of strong capacity growth across Asia and the Middle East with only modest increases across Europe and North America.

For example, Asia has see LCC capacity increase by 28.7 per cent over the period, with carriers offering a total of 129 million seats in 2013.

In contrast, North America saw capacity increase by just 1.5 per cent during the first six months of the year.

However, the market remains larger, with the region seeing 154 million seats offered this year, from a global total of 559 million.

Low-cost carriers in Indonesia (capacity up by 12.3 million seats), India (capacity up by three million seats), Thailand (capacity up by two million seats) and Malaysia (capacity up by 1.8 million) were responsible for half of total, global, LCC capacity growth.

When capital cities are examined, it is evident that capacity increases are being driven by emerging Asian nations.

Jakarta saw the strongest absolute LCC capacity growth of any capital, increasing by 2.8 million seats or 44 per cent, closely followed by Bangkok, up 1.2 million seats or 30 per cent.

In addition, the heavily developed Tokyo market also saw a significant increase in LCC seat capacity, which suggests the traditional focus on full service, could be changing.

Europe’s 0.8 per cent overall LCC capacity growth masks a far more complex picture: across much of southern Europe LCCs have reduced capacity, with Madrid seeing a fall in LCC departing seat capacity of 27 per cent, the highest of any capital city in the region. Athens and Rome also saw significant percentage decreases.

This picture contrasts sharply with the situation in much of Eastern and Northern Europe where Warsaw witnessed an enormous jump in LCC capacity, up 63 per cent year-on-year and now representing 27 per cent of total departing capacity from the city.

Istanbul and Copenhagen also saw LCC capacity increase sharply.

On a global basis, London’s LCC seat capacity is by far the largest of any city with nearly 15 million available LCC seats.

That is roughly 1.5 times the number of available seats at the next largest LCC city, Sao Paulo.

However, the rates of growth occurring at Jakarta (44 per cent) and Kuala Lumpur (15 per cent) suggest the third and fourth placed cities may move up the top ten ranking over coming years.

Alexandre Jorre, LCC specialist, Amadeus, commented: “We see a natural boom in LCC capacity across Asia, where point-to-point air travel is largely underserved.

“However, across the mature markets of Europe and North America capacity is constrained, which may explain why some LCCs are considering new approaches to secure future growth.”

For further information, please head over to the official Amadeus website.